Business Spectator - Aust residential property values rise 1.1%

Australian residential property values have risen 1.1 per cent in the first two months of 2009, recovering from a three per cent fall last year, new data shows.

The RP Data-Rismark Hedonic Property Index released on Tuesday showed Sydney and Melbourne were the key drivers of the 2009 rebound, with dwelling values up 0.5 per cent to $509,900 and 1.9 per cent to $428,600 respectively. The research showed the market had been helped by lower mortgage rates - which are at their lowest point in nearly 40 years after peaking at 9.6 per cent in August last year, before dropping to 5.8 per cent currently.

Economists expect the Reserve Bank of Australia (RBA) to cut the official cash rate by at least 25 basis points when the board of the bank meets next Tuesday, April 7. "The recovery in prices over the last quarter has been driven by the 40 per cent reduction in mortgage rates, the boost to the first home owners grant, the government's fiscal stimulus and a significant housing shortage," Rismark International chief, Christopher Joye, said.

Mr Joye said the first home owners grant had been a successful policy, and the health of Australia's financial system meant the market had been more resilient than other countries around the world. "The resilience of Australia's housing market has also been underpinned by our robust banking system, which (sic) CBA (Commonwealth Bank of Australia) recently reporting that its 90 day mortgage default rate was a stunningly low 0.38 per cent," Mr Joyce said.

Business Spectator - Aust residential property values rise 1.1%


First Home Loan Specialists Comment

More evidence that the property market is in pretty good shape and that it is widely agreed that interest will cut further at RBA April meeting.

Greg Brierley
Principal
www.firsthomeloanspecialist.com.au

Blogged with the Flock Browser